Calaunan, Ma. Stela P.

G. R. No. 132415 January 30, 2002

MIGUEL KATIPUNAN, INOCENCIO VALDEZ, EDGARDO BALGUMA, and LEOPOLDO
BALGUMA, JR., Petitioners,
vs.
BRAULIO KATIPUNAN, JR., Respondent

SANDOVAL-GUTIERREZ, J.:

Facts:
Respondent Braulio Katipunan, Jr. is the owner of a 203 square meter lot and a five-door
apartment constructed thereon located at 385-F Matienza St., San Miguel, Manila. The lot is
registered in his name under TCT No. 109193 of the Registry of Deeds of Manila. The apartment
units are occupied by lessees.chan
On December 29, 1985, respondent, assisted by his brother, petitioner Miguel Katipunan, entered
into a Deed of Absolute Sale with brothers Edgardo Balguma and Leopoldo Balguma, Jr. (co-
petitioners), represented by their father Atty. Leopoldo Balguma, Sr., involving the subject
property for a consideration of P187,000.00. Consequently, respondent’s title to the property was
cancelled and in lieu thereof, TCT No. 168394 was registered and issued in the names of the
Balguma brothers. In January, 1986, Atty. Balguma, then still alive, started collecting rentals
from the lessees of the apartments.
On March 10, 1987, respondent filed with the RTC of Manila, Branch 21, a complaint for
annulment of the Deed of Absolute Sale. He contended that his brother Miguel, Atty. Balguma
and Inocencio Valdez ( one of the petitioners) convinced him to work abroad. Through insidious
words and machinations, they made him sign a document purportedly a contract of employment,
which document turned out to be a Deed of Absolute Sale. He further alleged that he did not
receive the consideration stated in the contract. He claimed that there was evident of bad faith
and conspiracy in taking advantage of his ignorance, he being only a third grader.
The RTC dismissed the complaint because Braulio failed to prove his cause of action since he
admitted that he obtained loans from the Balgumas, he signed the Deed of Absolute Sale, and he
acknowledged selling the property and stopped collecting the rentals. But when the case was
elevated, the decision of RTC was reversed and it was held that Braulio was incompetent, has
very low I.Q., illiterate and has a slow comprehension. The CA based its decision on Arts.1332
and 1390 of NCC and Sec. 2, Rule 92 of the Rules of Court, concerning the incompetence of a
party in contract.

Issue:
Whether or not there was a valid contract of sale between the parties.

Ruling:
No. The Supreme Court found the devoid of merit. There was a vitiated consent on the ground
that one of the parties is incapable of giving consent therefore the contract is voidable under
Article 1330 of the Civil Code. Consent may be vitiated by any of the following: mistake,
violence, intimidation, undue influence, and fraud. The presence of any of these vices renders the
contract voidable and not void ab initio. The contract is binding unless annulled with proper
court action and the effect is to restore the parties to the status quo ante in so far as legally and
equitably possible. Since the Deed of Absolute Sale between respondent and the Balguma
brothers is voidable, and hereby annulled, then the restitution of the property and its fruits to
respondent is just and proper. The rentals from the apartment since January 1986 plus interest at
the legal rate.